SEMI: Chip manufacturing recovery expected in Q3

18 May 2023

The global semiconductor manufacturing industry is expected to make a gradual recovery beginning in the third quarter of 2023 after moderation in the second quarter, according to a new report from SEMI.

IC sales and silicon shipments are due to post quarter-over-quarter improvements, but elevated inventories continue to dampen shipments and fab utilization rates. Because of this, these rates remain lower than levels registered from last year, SEMI said.

Additionally, chip equipment sales continue to decline in parallel with the chip downturn with capital expenditure adjustments by major industry stakeholders.

SEMI said indicators likely point to the bottoming of the downturn in the second quarter of 2023 with a slow recovery beginning in the second half of the year.

“The current market downturn is compounded by soft consumer demand and elevated inventory levels and has led to a sharp decline in semiconductor fab utilization,” said Clark Tseng, senior director of market intelligence at SEMI. “However, as the inventory correction comes to an end in mid-2023, a mild recovery is expected in the second half of the year driven by a pickup in demand for inventory and the holiday season.”

In the later part of the year, production cuts and capital expenditure reductions, especially in the memory market, will have a positive impact on market fundamentals, SEMI said. Overall, this will result in a more balanced market environment.

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